Truong v. City of Houston

• Decision Date: 19 December 2002
• Docket Number: No. 01-01-00022-CV.,01-01-00022-CV.
• Citation: 99 S.W.3d 204
• Parties: Thin Van TRUONG, Mai X. Truong, William Giron, and Elena Mandujano, Appellants, v. The CITY OF HOUSTON, Appellee.
• Court: Texas Court of Appeals

99 S.W.3d 204

Thin Van TRUONG, Mai X. Truong, William Giron, and Elena Mandujano, Appellants, v. The CITY OF HOUSTON, Appellee.

No. 01-01-00022-CV.

Court of Appeals of Texas, Houston (1st Dist.).

December 19, 2002.

Rehearing Overruled January 13, 2003.

COPYRIGHT MATERIAL OMITTED

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George W. Dana, Houston, for appellants.

Judy K. Hatfield, Houston, for appellee.

Panel consists of Justices HEDGES, NUCHIA and RADACK.^*

OPINION ON MOTION FOR REHEARING

SHERRY RADACK, Justice.

We deny appellants' motion for rehearing, but withdraw our opinion and judgment dated November 14, 2002, and substitute this opinion in its stead.

This case arises from the City of Houston's (Houston) suit to enjoin appellants from any commercial activity on their property. The trial court granted Houston's motion for summary judgment, which sought to enforce a deed restriction encumbering appellants' property. Appellants appeal from the grant of summary judgment. We hold that (1) Houston was acting in its governmental function, and (2) appellants' defenses fail to abrogate Houston's authority to enforce the deed restriction. Accordingly, we affirm.

Background

Appellants, Thin Van Truong, Mai X. Truong (Truong appellants), William Giron, and Elena Mandujano all own lots in Meadowbrook subdivision, Section "C". Each of the lots borders Howard Drive. These lots are located on the outside perimeter of the Meadowbrook subdivision. The Truongs purchased their lot in March 1997. Giron purchased his lot in November 1995, and Mandujano purchased her lot in February 1995. All of the lots are subject to a residential-use-only deed restriction, which was created in August 1945.

Standard of Review

A trial court must grant a motion for summary judgment if the movant establishes that no genuine issue of material fact exists and the movant is entitled to judgment as a matter of law. TEX.R. CIV. P. 166(c); Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex.1991). When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant and indulge every reasonable inference and resolve any doubts in favor of the nonmovant. Nixon v. Mr. Prop. Mgm't Co., Inc., 690 S.W.2d 546, 548-49 (Tex. 1985).

Applicable Statutes

Houston brought suit to enforce deed restrictions in appellants' subdivision. TEX. Loc. GOV'T CODE ANN. § 212.133 (Vernon Supp.2002). The Local Government Code provides that a non-zoned, incorporated city has the power to sue to enforce any restriction contained or incorporated by reference in a recorded plan, plat, replat, or other instrument affecting a subdivision inside the city's boundaries. TEX. Loc. GOV'T CODE ANN. §§ 212.131-33 (Vernon Supp.2002). Restrictions in a plat recorded before August 30, 1965, may be enforced, but violations occurring before that date may not be enjoined or abated. TEX. LOC. GOV'T CODE ANN. §§ 212.131-33 (Vernon Supp.2002). The restrictions at issue were recorded August 24, 1945. Thus, Houston had the authority granted to it under the Local Government Code because the deed restrictions were being enforced after the grant of authority to Houston and arising out of deed restrictions that were validly and timely recorded.

Discussion

In point of error one, appellants argue that the trial court erred in granting summary judgment for Houston. Appellants contend that they properly pleaded and offered evidence to show the existence of a material fact on numerous affirmative defenses sufficient to defeat the summary judgment. Specifically, appellants argue that, when Houston enforces deed restrictions, its function is proprietary. Appellants further urge, because its function is proprietary, Houston is subject to appellants' affirmative defenses. For their authority, appellants rely on Oldfield v. City of Houston, 15 S.W.3d 219 (Tex.App.-Houston [14th Dist.] 2000 pet. denied).

On the other hand, Houston contends that appellants' reliance on Oldfield is misplaced. Houston claims that the Oldfield decision erroneously concluded that, when a city enforces deed restrictions, its function is proprietary-not governmental. Moreover, Houston argues after the Oldfield decision was issued, the Texas Legislature specifically addressed the issue. In 2001, the legislature amended the relevant portions of the Texas Civil Practice and Remedies Code and the Local Government Code to add the enforcement of land-use restrictions to the laundry list of activities defined as governmental functions. TEX. CIV. PRAC. & REM.CODE ANN. § 101.0215(a) (Vernon Supp.2002); TEX. LOC. GOV'T CODE ANN. § 212.137 (Vernon Supp.2002). Consequently, Houston argues that, when it enforces deed restrictions, it is acting in its governmental function, and thus, it is not subject to any affirmative defenses. Finally, Houston contends that municipal enforcement of deed restrictions should be analyzed in accordance with principles of zoning, which have long been held to be government functions.

To begin our analysis, we will consider appellants' arguments in light of (1) Texas common law, (2) the Oldfield decision, and (3) the relevant 2001 amendments to the Texas Civil Practice and Remedies Code and the Local Government Code. Lastly, we will address Houston's argument that the functionary distinction should be analogized in accordance with principles of zoning and land-use regulation powers.

Texas Common Law

Texas courts have recognized that certain affirmative defenses do not apply if a city is exercising a governmental, as opposed to a proprietary, function. For this reason, cases involving claims against a city begin with the threshold question of whether the city was acting in a proprietary or governmental function. Bailey v. City of Austin, 972 S.W.2d 180, 192 (Tex. App.-Austin 1998, pet. denied) (citing Gates v. City of Dallas, 704 S.W.2d 737, 738 (Tex.1986)). The question of where to draw the line between the city's proprietary and governmental functions is not an easy one — a fact that the Texas Supreme Court has recognized. See City of Houston v. Shilling, 150 Tex. 387, 240 S.W.2d 1010, 1012 (1951).

Under the common law, Texas courts developed certain rules for evaluating the distinction between proprietary and governmental functions. Generally speaking, a proprietary function is one a city performs, in its discretion, primarily for the benefit of those within the corporate limits of the city, rather than for the use by the general public. City of Glade-water v. Pike, 727 S.W.2d 514, 519 (Texas 1987) (citing Gates, 704 S.W.2d at 739). Actions undertaken for the benefit of private enterprise or the residents of the city, rather than for the benefit of the general public, were deemed proprietary. City of Fort Worth v. George, 108 S.W.2d 929, 931 (Tex.Civ.App.-Fort Worth 1937, writ ref'd). Governmental functions are "those public acts which the municipality performs as the agent of the State in furtherance of general law for the interest of the public at large." Bailey, 972 S.W.2d at 192; Gates, 704 S.W.2d at 738-39; see also City of Houston v. Southwest Concrete Constr Inc., 835 S.W.2d 728, 730-32 (Tex.App.-Houston [14th Dist] 1992, writ denied). The key difference between a proprietary and governmental function is that the city functions in its governmental capacity when it performs functions mandated by the state. Bailey, 972 S.W.2d at 192-93; Southwest Concrete, 835 S.W.2d at 730-32; Josephine E. Abercrombie Interests, Inc. v. City of Houston, 830 S.W.2d 305, 308 (Tex.App.-Corpus Christi 1992, writ denied).

In the next section we will review Texas common law as applied in the Fourteenth Court Of Appeals' decision of Oldfield v. City of Houston, 15 S.W.3d 219, 226 (Tex. App.-Houston [14th Dist.] 2000, pet. denied).

The Oldfield Decision

Appellants request that we follow the rule of law established by the Fourteenth Court Of Appeals' decision in Oldfield v. City of Houston, 15 S.W.3d 219, 226 (Tex. App.-Houston [14th Dist.] 2000, pet. denied). The court in Oldfield held that a city served a proprietary, rather than governmental function, when it sought to enforce the deed restrictions. As such, affirmative defenses may be asserted to bar the city's enforcement of deed restrictions. Id. Houston claims that the Oldfield decision, because it was based on the premise that enforcement of deed restrictions by a city is a proprietary function, is erroneous. Houston further claims the decision is wrong, because the legislature has legislatively overruled the Oldfield decision.

2001 Legislative Amendments

We note that the legislature has amended the statutes that relate to a city's function when it is enforcing deed restrictions to specifically state that, when a municipality sues to enforce a land use restriction, it is acting in its governmental capacity. See TEX. LOC. GOV'T CODE ANN. § 212.137 (Vernon Supp.2002). The legislature's action has no application to this case because the amendment became effective on September 1, 2001, while the present case was pending. While the legislature's action is not outcome determinative to this case, we think the legislature's action supports the rationale of our decision.¹

We do not accept appellants' invitation to follow the Oldfield decision. Instead, we agree with Houston that the functionary distinction should be analogized in accordance with principles of zoning and land-use regulation powers.

Zoning Ordinances

When the city is enforcing zoning ordinances, it is serving in its governmental function. A governmental unit's zoning authority is derived from the police power of the state, and all property is held subject to the valid exercise of the power. Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 387, 47 S.Ct. 114, 118, 71 L.Ed. 303 (1926); Lombardo v. City of Dallas, 124 Tex. 1, 73 S.W.2d 475, 479 (1934). Both zoning ordinances and land-use ordinances are valid exercises of a city's police power to safeguard the health, comfort, and general...